12.6. Performing Contract Closure (PMBOK, Section 12.6)

Contract closure is analogous to administrative closure. Its purpose is to confirm that the obligations of the contract were met as expected. The project manager, the customer, key stakeholders, and, in some instances, the seller may finalize product verification together to confirm that the contract has been completed.

Contract closure can also be linked to administrative closure, because it is the process of confirming that the work was finished. In instances where the contract was terminated, contract closure is reviewed and the project is considered closed because of the termination. The project records should be updated to reflect the contract closure and the acceptance of the work or product.

12.6.1. Auditing the Procurement Process

The successes and failures within the procurement process of the project are reviewed from the procurement planning stage through to contract administration. The intent of the audit is to learn what worked and what didn't during the procurement processes. This knowledge can then be applied to other areas within the current project and to other projects within the performing organization.

12.6.2. Completing Contract Closure

Once the deliverables have been accepted and the contract has been closed, it's essential to collect all of the contract information and record it in the contract file. A contract file is a complete indexed set of records of the procurement process and is incorporated into the administrative closure process. These records include financial information as well as information on the performance and acceptance of the procured work.

Assuming the procured work is acceptable and meets the requirements of the contract, the contract can be closed. The formal closure of a project comes in a written notice from the contract officer to the seller. The notice informs the seller that the work is acceptable and that the contract is considered closed. The formal closure process may vary, according to the size of the project. The requirements for contract closure should be documented within the contract.